The economy of the United Kingdom may avoid a recession in 2023, but millions of low- and middle-income households in the country will suffer a financial blow to their income of up to 4,000 pounds ($4,800) this year, the National Institute of Economic and Social Research (NIESR) said on Wednesday
MOSCOW (Pakistan Point News / Sputnik - 08th February, 2023) The economy of the United Kingdom may avoid a recession in 2023, but millions of low- and middle-income households in the country will suffer a financial blow to their income of up to 4,000 pounds ($4,800) this year, the National Institute of Economic and Social Research (NIESR) said on Wednesday.
"Middle-income households will face a hit to their personal disposable income ranging from 7% to 13%, reaching up to 4,000 pounds in the financial year 2022-23," NIESR said in a statement.
The think tank, whose opinions are watched closely by the UK authorities, added that due to high energy bills and the rising cost of food, at least 7 million households � about a quarter of the UK population � would not be able to fully pay their planned electricity and food bills from their post-tax income in 2023.
The institute urged the government to introduce a "social tariff" and a variable price cap to cover future high energy bills. The measure would lower gas and electricity bills for poorer households that use less energy, and encourage efficient energy consumption for wealthier households that usually use more energy.
The UK's cost of living crisis has been provoked by historic inflation, which reached a 41-year high of 11.1% in October 2022 and has slowed down insignificantly in the months that followed. In November, the Bank of England raised its interest rate by 75 basis points to 3% per annum, the largest single increase in 33 years. The regulator also said that the UK economy had entered a recession expected to last until the second half of 2024.
